• By Imran Zafar
  • Fri, 19 Jul 2024 07:46 PM (IST)
  • Source:JND

The Karnataka cabinet's recent approval of a bill reserving a major portion of private sector jobs for locals has sparked controversy. Criticised by industry bodies and stakeholders, the bill has been put on hold following backlash. This development, however, could benefit other metropolitan cities like Hyderabad, Pune and other metropolitan cities in the region that have more investor-friendly employment policies.

The bill aimed to reserve 50 per cent of managerial and 70 per cent of non-managerial positions for Kannadigas, but it faced significant opposition. The National Association of Software and Service Companies (NASSCOM) expressed deep concern, suggesting that such restrictions could drive startups and IT companies out of Karnataka. 

The proposed bill, intended to protect local interests, was labelled regressive and unconstitutional by notable industry figures like TV Mohandas Pai and Kiran Mazumdar-Shaw. They argued that it could undermine Bengaluru's status as a tech hub by restricting access to skilled talent.

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As a result, cities like Hyderabad are poised to gain. Telangana offers incentive-based employer policies and has been competing with Bengaluru as India's startup capital. Telangana Minister Sridhar Babu Duddilla welcomed IT companies, emphasising Hyderabad's potential to become a global IT hub and the ''AI capital of the world''. 

Additionally, Andhra Pradesh and Kerala also extended invitations to investors, promising conducive environments for business operations. Andhra Pradesh Minister Nara Lokesh took to X to invite investors after the apex body of the IT sector, NASSCOM, voiced its disappointment over the passage of the bill by Karnataka's Cabinet.  

"We understand your disappointment. We welcome you to expand or relocate your businesses to our IT, IT services AI and data center cluster at Vizag. We will offer you best-in-class facilities, uninterrupted power, infrastructure and the most suitable skilled talent for your IT enterprise with no restrictions from the Government,'' the minister said, adding that Andhra Pradesh welcomes them.

Kerala Minister P Rajeev also invited the firms to invest in Kerala, while stating that employee talent and merit should be the only criteria for recruitment. ''It is the right time for companies to discover Kerala, with its highly skilled talent pool, the best climate, and a hassle-free environment. Embrace this opportunity,'' he said while sharing the data related to the growth of the state.

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Chief Minister Siddaramaiah's response to the backlash included deleting a tweet promoting the bill and holding the legislation for further review. The bill, if enacted, could face legal challenges similar to Haryana's local hiring mandate, which was quashed by the Punjab and Haryana High Court in 2023 for being unconstitutional.